Welcome to The Fly's latest edition of "Charged," where we look back at some recent analysts' notes, news and activity in the electric vehicle and clean energy space.
TARGET RAISES: On Wednesday, December 8, New Street analyst Pierre Ferragu raised the firm's price target on Tesla (TSLA) to $1,580 from $1,298, while keeping a Buy rating on the shares. The analyst expects 280,000-285,000 units to be delivered in the fourth quarter, which would be a sequential increase of 40,000 units and compares to a consensus forecast of 266,000. Also, based on "record" October production data, Ferragu estimates Tesla's Shanghai plant is now at a greater than 700,000 annual run-rate, which he says is well above the 450,000 unit initial target. The analyst, who sees Tesla auto revenues approaching $80B next year, expects Tesla to sustainably trade in the 50-100 P/E range, and probably in the higher-end, leading the stock to end the year "at least" at his $1,580 target, which represents 50% upside from recent levels.
UBS analyst Patrick Hummel also raised the firm's price target on Tesla to $1,000 from $725 but kept a Neutral rating on the shares. The analyst believes that company is likely to continue beating top line growth and margins consensus expectations in 2022 in a global EV market that keeps accelerating rapidly thanks to its structurally better access to chips and batteries through vertical integration - Tesla's "key differentiator versus most competitors. Hummel added that Tesla also enjoys 20% global BEV market share and industry-leading profitability, but its current valuation "fully reflects" its positives.
Meanwhile, Tesla CEO Elon Musk tweeted on Thursday that he is "thinking of" leaving his job and "becoming an influencer full-time." It wasn't immediately clear whether he was being serious.
LUCID SUBPOENA FROM SEC: Shares of Lucid Group (LCID) were under pressure last week after the company disclosed that on December 3 it had received a subpoena from the SEC requesting the production of certain documents related to an investigation by the SEC. Although there is no assurance as to the scope or outcome of this matter, the investigation appears to concern the business combination between the company and Atieva, Inc. and certain projections and statements. The company is cooperating fully with the SEC in its review.
RIVIAN WINS MOTOTREND TRUCK OF THE YEAR: MotorTrend said: "'The most remarkable pickup truck we've ever driven.' That's how we've previously described the 2022 Rivian R1T, and now it can claim even higher praise as the 2022 MotorTrend Truck of the Year. The Rivian R1T would win praise if it were merely a credible pickup truck that is also an electric vehicle, but it's far more. Not content to simply mount an electric motor or two under the hood or box of a traditional pickup, Rivian used the opportunity to re-examine what a modern pickup truck could be."
SILVERADO EV PRODUCTION: General Motors (GM) will begin production of the Silverado EV early 2023 ahead of sales late that year, Automotive News' Hannah Lutz reported. The electric Silverado will surface over a year after its expected main rival, Ford's (F) F-150 Lightning, the report noted.
Meanwhile, Automotive News' Michael Martinez reported that Ford is postponing the beginning of production of battery-electric versions of its Explorer and Lincoln Aviator crossover vehicles by about 18 months. The car maker also no longer intends to build such vehicles in Cuautitlan, Mexico, Martinez noted.
'COMPELLING' INVESTMENT OPPORTUNITY: Tigress Financial analyst Ivan Feinseth initiated coverage of Rivian Automotive (RIVN) with a Buy rating and $147 price target. The company has an "innovative and exciting product line" that enables investors to participate in the ongoing electrification of the global auto industry, Feinseth told investors in a research note. When coupled with its partnership with Amazon (AMZN), Rivian shares are a "compelling investment opportunity," the analyst said.
EV ADOPTION TREND: Tiger Securities analyst Bo Pei initiated coverage of Nio (NIO) with a Buy rating and $45 price target. The company is well positioned to "ride the global smart" electric vehicle adoption trend in the coming decade and "become a major player in the field," Pei told investors in a research note. The analyst believes Nio has "successfully established a first-class brand image with superior performance, elegant design, leading services, and a unique user community."
The analyst also started coverage of XPeng (XPEV) with a Hold rating and $50 price target, saying current traffic laws do not allow XPeng models to fully unlock its autonomous driving power and that other players "might have enough time to catch up."
Additionally, he initiated coverage of Li Auto (LI) with a Buy rating and $40 price target as the analyst believes extended-range electric vehicles offer an attractive value proposition to buyers, which should help Li "obtain a reasonable market share."
BUY EVGO: JPMorgan analyst Bill Peterson initiated coverage of EVgo (EVGO) with an Overweight rating and $20 price target. The analyst views the company as a leader in the fast charging electric vehicle space. EVgo is generating revenue streams from its installed charger base and "prudently added" capacity as utilization increases and in order to meet future demand, Peterson told investors in a research note. The analyst believes EVgo has "attractive and growing partnerships" across car makers, ride-share and autonomous driving fleets, and anticipates an increasing portion of subscription-like revenue with potential margin upside through increasing software contributions and better energy rates.
SELL XOS: BofA analyst Koji Ikeda initiated coverage of Xos (XOS) with an Underperform rating and $3.00 price target. While the company has developed and tested its vehicle platform, its estimates appear aggressive considering the company's limited production and operations experience along with the "significant challenges" posed by its OEM-styled approach to markets, the analyst told investors in a research note.
BEST-IN-CLASS: JPMorgan analyst Mark Strouse upgraded Brookfield Renewable Partners (BEP) to Overweight from Neutral with a $46 price target. The company, along with related company Brookfield Renewable (BEPC), is "best-in-class" in the development and ownership of renewable projects, offering "high-quality cash yield and good visibility into growth," Strouse told investors in a research note. The analyst believes the stock should appeal to investors seeking exposure to ESG, energy and technology, as well as yield investors seeking long-term exposure to the secular growth theme of renewable energy.
BULLISH ON SONO MOTORS: Craig-Hallum analyst Eric Stine initiated coverage of Sono Motors (SEV) with a Buy rating and $23 price target. Sono Motors sits at the nexus of both solar and electrification with its proprietary and disruptive solar technology and solar electric vehicle providing a solution which harnesses the sun for enhanced performance and to drive the clean transportation transition, the analyst contended.
